they are not upping pay, because it's not profitable. to pay ppl enough $ to entice them to do carpentry is not profitable, hence so few of them. I remember climbing a 4,000 ft mountain in a day in the hot sun..you could not pay me enough $ to ever want to do that again, and even if you could, it would never be profitable. That's why things are airlifted.

Yeah but carpentry has to be done and is getting done. It’s not so expensive you stop the job and wait for a lower price. My guess is you just use other unskilled labor and go for good enough. Maybe a true skilled carpenter isn’t worth the premium or the value isn’t clear to the buyer

The way it works is you have a subcontractor pay an immigrant under the table and get it done.

The US clamped down on Mexican border crossings. Guess what? There’s no labor. Who would have thunk it.

This along with the cyclical nature of the housing industry are definite negatives for carpentry as a long-term career for citizens in the US. The fact that the article doesn’t mention the under the table nature of illegal immigrant work crews and how that puts downward pressure on wage rates is a blatant omission.

>The US clamped down on Mexican border crossings.

Now, the border is more porous than ever. There's plenty of labor -- go to any home improvement store parking lot. And that's just the illegal labor -- boost wages and you could recapture legal workers.

But for now, go to any construction site in California, and you'll hear only Spanish spoken between the carpenters, roofers, etc. and their supervision.

Those people were around in 2020 (outside Home Depot here in Seattle) but are all gone now. I guess they are all just really busy rather than being deported or something.

I wouldn’t assume all or even most labor on constructions sites are illegal immigrants just because they speak Spanish, if only because the USA has a lot of legal first-gen Hispanic immigrants.

So the angry man on the radio says.

Back here on earth, roofers are making $36/hr. My brother’s restaurant is paying $28-32/hr for line cooks and dishwashers.

Housing starts are very cyclical, they absolutely can and do stop building things when it stops being economically favorable to do so. This is one of the reasons we have so few carpenters. It’s a boom and bust industry.

>they are not upping pay, because it's not profitable.

They could raise their prices too. When they say "it's not profitable" they mean "we would like to have workers at low pay, but still enjoy selling at low prices".

The market is efficient. You raise prices and pay workers more -> Fewer people are willing to purchase at that price -> You make less profit -> You don't make enough profit to pay people more. It's a complex problem. You could make the same market argument as: if it was profitable to charge more and pay workers more, why doesn't anyone just start a company that does that and outcompete the others?

> The market is efficient.

The market is more efficient, on average, than other methods of price setting. It’s not perfect efficiency (or even close to it).

Supply and demand are always in flux, and the repeated attempts to match these is what causes market efficiency. It is frequently possible that prices are not keeping up with supply and demand, and there exists arbitrage opportunity that requires people knowledgeable about the market to act on.

> if it was profitable to charge more and pay workers more, why doesn't anyone just start a company that does that and outcompete the others?

They do (sans outcompeting). We just call them luxury goods. It's a different market.

Yes, and figuring out how to get orders of magnitude more housing production at dramatically lower prices is one of the most socially and morally important problems in the world today.

Not really. Most of the cost of housing is land anywhere it’s expensive. We have the technology to stack dwellings vertically. Where that’s illegal and there’s lots of demand housing is expensive. Otherwise not.

Is construction labor really a big factor in the final selling or rental price of a home?

Apparently labour is ~35% of the cost of a house [1] though I imagine this varies a lot depending on the house being built, type of construction, location etc. Still, seems safe to assume labour is a large part of the cost.

[1] https://www.homebuilding.co.uk/advice/how-much-does-it-cost-...

>Still, seems safe to assume labour is a large part of the cost.

Does it? I've read time and again that land is the largest part of the cost - in any place where cost is significant.

Just to clarify, Im saying labor is a large part of the cost, not necessarily the largest. I agree land is probably a bigger cost in a lot of areas.

Yeah, I would think in a city with a runaway housing market (like Vancouver), it's more like 5%

Idk labor rates have also run away

then you lose to cheaper competitors.

there is a market for hand-made furniture but Ikea stuff dominates.

> there is a market for hand-made furniture but Ikea stuff dominates.

And boyyyyy is there a gap between these. I feel like I’m either paid $100 for shitty pressboard or thousands upon thousands for hardwood.

Thankfully, there are some decent pieces left from 50 or so years ago that are both solid and dirt cheap at thrift/antique shops.

Haha, very good timing, I just climbed a 4k mountain today in a Virginia heatwave. It was almost 100F real feel in the valley, and if I wasn't doing it for my own satisfaction I'd definitely want a good amount of money for it!

Funny to hear the mountain example. One of my favorite hikes was a 115F climb up the Flatiron.

Or US government can start to issue large number of temporary "fruit picker" visas.

New Zealand does exactly this, and I’m of two minds on it. On the one hand, it seems easy to say that if you don’t have enough workers, you’ve got to raise your price - it’s a free market, right? Except it’s not. NZ has a very generous welfare system (compared to its very small GDP) and this means that being un- or under-employed is a viable option.

On the other hand, the jobs also bring in a lot of money for the islanders who perform them, and the wages are relatively high by international standards due to NZ’s high minimum wage.

We already have a cost of living crisis, and raising the price of fruit and vegetables by removing these visas for seasonal workers seems like it would hurt everyone without helping anyone in particular.

> We already have a cost of living crisis, and raising the price of fruit and vegetables by removing these visas for seasonal workers seems like it would hurt everyone without helping anyone in particular.

It helps local labor sellers to be in higher demand and hence negotiate higher prices who may have taken the option to pick fruit and vegetables.

I understand that argument, but the very high minimum wage and availability of state support means that in practice there is no market-clearing price for this labour. New Zealanders simply don’t want to do these jobs.

The is a price but regulators cap it off. It may not be a good business but a lot of things aren’t a good business if you actually have to pay market wages.

I would bet quite a bit of money that if you start paying $100/hour, start selling fruit at luxury prices, and ban all cheaper imported fruit, the market will clear very quickly. Then again the government may lose the next election because of that.

So maybe those jobs shouldn't be done? It doesn't sound like a complete disaster ...

Or maybe having them done by people who are willing to do them would be good.

That’s exactly right. There’s no market-clearing price because of regulatory distortion. You’re free to like or dislike that as a policy, but it is clear that it removes the information value of the price signal.

Sweden also. Berries and mushroom are picked almost exclusively by foreign workers. The government even had to open an exception to COVID restrictions to allow those workers to come in and to their job, as otherwise a whole harvest season could've been lost as there's no way swedes would do the job themselves.

I kind of dislike these industries that depend on imports of cheap labor from poor countries and the governments pandering to them because the locals won't do that kind work, since in that case, the government (read, the taxpayers) is subsidizing unprofitable business that cannot survive in free market conditions by manipulating the labor market in the favor of business owners through the import of cheap labor below local market rates.

This practice should be stopped, or we should reconsider the so called "free market" if the government can manipulate it to bail out the business owning class whenever they're not profitable.

Sweden and most of Northern Europe would have no farms anymore if it were not for plenty of government subsidies and protectionism. It's a lot cheaper to farm where the weather is not just barely above freezing and there's plenty of sun.

We should just be honest and call I’ll the exploitation and arbitrage market

I'm confused by this part: <<NZ has a very generous welfare system (compared to its very small GDP)>> Did you mean to say "GDP per capita"? To me: The generosity of a social safety net is about two things: (1) culture (do you care about non-family) and (2) GDP per capita (can you afford it).

This is exactly what the US government does with H2A visas.

Same thing with housing.

There is no housing shortage, there are just people who aren't willing to pay the market rate for housing. Up your price that you are willing to pay and you will have housing. If you can't pay the market rate for housing, do not be surprised when you do not have housing.

Basic economics.

I would argue that there is a housing shortage in many American cities insofar as there is demand for far more housing than currently exists. The housing would be built y the market if it were legally allowed, or not otherwise strongly disincentivized. As such prices are rising faster than inflation. This tells us that demand outstrips supply.

When demand outstrips supply, one thing that can happen is that prices rise until demand matches supply. That's what is happening now. That's not a shortage.

There are all sorts of restrictions on what type of labor is legally allowed. Age restrictions, hours, licensing, unions, plenty of other regulation. But when there is a story on this site about how employers say there is a shortage of workers, the typical answer is "there is no shortage, raise wages". That's because the typical reader of this site isn't someone trying to run a low margin business, the typical reader of this site is someone who moved to one of the most expensive areas of the world and subsequently realized that for some reason, housing is expensive there, so the government needs to make changes.

But that's not a shortage. Just because you can't afford something at the market clearing price doesn't mean there's a shortage. And just because you can't afford something at the market clearing price doesn't necessarily mean the government needs to make changes. You might need to make changes instead.

> That's not a shortage.

That's literally the definition of a shortage[1], "a condition where the quantity demanded is greater than the quantity supplied at the market price".

> But that's not a shortage. Just because you can't afford something at the market clearing price doesn't mean there's a shortage. And just because you can't afford something at the market clearing price doesn't necessarily mean the government needs to make changes. You might need to make changes instead.

In the case of housing, the government creates the condition whereby there is not enough housing in places where there is the most economic activity. It's a huge drag on the overall economy and well documented.

[1]https://www.investopedia.com/terms/s/shortage.asp

> people who aren't willing to pay the market rate

Or who are unable.

I have a sincere question, though. What about the (potential, I’m still mulling this over) distortion introduced by foreign players flooding the market? I can tell you firsthand that places like Seattle, Vancouver, London, Los Angeles, and New York City experience heretofore unheard-of amounts of money coming in from prosperous but less stable economies like China.

This ignores regulatory barriers that impact costs.

If it costs 500k to permit and inspect a house, you can absolutely complain

Where does it cost 500k for a housing permit?

Soft costs and impact fees for a home in San Francisco or New York can easily be in that range.

Sure, but a permit and inspection does not cost 500K. Making a lot conform might cost that much, sure.

Poster here, 500k was not intended as literal or typical, just and example of how regulatory costs can add to market price.

That said, I have spoken to builders who described city costs of several hundred thousand dollars for renovating or building single family/duplex homes. For start, SF permit costs are a % of construction with 6-9% for the basic permit. If you do the work yourself, you have to pay a % of the market cost if you were to contract it out. Then there are a plethora of additional fees and permits, and you can find some of them here {1}.

I think you are right that the single biggest cost is code conformance, minimum size, construction ect. Some of the requirements are ridiculous. For example California requires electrical outlets every 48 inches along countertops, independent of if I want them at all. This mentality extends to every part of the the permitting process.

https://sf.gov/step-by-step/get-building-permit-house-review

Local zoning means that the supply of housing is artificially constrained far below what would be an efficient use of land. Are you suggesting that labor has similar constraints in carpentry, or just being glib?

Well, immigration laws artificially constrain supply of laborers.